Short-term business loans can give your business the fast cash it needs to bridge cash-flow gaps, handle emergencies and unexpected expenses, or take advantage of a business opportunity.
Think of them as quick-turnaround loans: Borrow what you can pay back relatively quickly so you can focus on running your business rather than managing debt.
You can choose between a short-term loan or a short-term line of credit. Lines of credit are more flexible and generally have shorter repayment periods than short-term loans, making them more suitable for managing cash flow. (However, there are pitfalls of short-term business loans.)
Here are short-term financing options from online business lenders.
Short-term business loans: Summary of options
For more details:
Short-term lines of credit
If you need to bridge cash-flow gaps: Kabbage, Fundbox and bluevine
Kabbage and Fundbox are good options for borrowers with bad credit.
- Pros: No minimum personal credit score is required at either lender; fast funding
- Cons: Kabbage is costly compared with other options; Fundbox repayment terms only go up to 12 weeks, compared to six or 12 months at Kabbage
- Loan amount: $2,000 to $250,000.
- APR: 24% to 99%.
- Loan term: 6 or 12 months.
- Funding time: A few minutes to several days.
- Read our Kabbage review.
Line of Credit
- Loan amount: $1,000 to $100,000
- APR: 10.1% to 79.8%
- Loan term: 12 weeks
- Funding time: As fast as next business day
- Read our Fundbox review
BlueVine is a good option for newer businesses.
- Pros: Only requires a minimum six months in business to qualify; fast funding
- Cons: High borrowing costs; need strong revenue
Line of Credit
- Loan amount: $5,000 to $250,000.
- APR: 15% to 78%.
- Loan term: Repaid over 6 or 12 months.
- Funding time: As fast as 24 hours.
- Read our BlueVine review.
Short-term business loans
If you need fast cash: OnDeck and StreetShares
- Pros: High borrowing amounts; fast funding
- Cons: Costly financing; frequent repayments
StreetShares is a good option if you have low revenue.
- Pros: Revenue requirement starts at $75,000; no prepayment penalties
- Cons: Funding maxes out at $150,000 for term loans
- Loan amount: $5,000 to $500,000.
- APR: 16.7% to 99.4%, as of Q1 2018
- Loan term: Repaid daily or weekly for 3 to 36 months.
- Funding time: As fast as 24 hours but typically a few days.
- Read our OnDeck review.
*APRs change quarterly
- Loan amount: $2,000 to $150,000
- APR: 9% to 40%
- Loan term: 3 to 36 months
- Funding time: 1 to 5 days
- Read our StreetShares review
If you want low rates: Credibility Capital
Credibility Capital is a good option if you have strong credit.
- Pros: Low rates starting at 10%; no prepayment penalties
- Cons: Requires strong credit; shorter repayment terms
- Loan amount: $10,000 to $350,000
- APR: 10% to 25%
- Loan term: 1, 2 or 3 years
- Funding time: 7 days on average
- Read our Credibility Capital review
Pitfalls of short-term loans
While short-term business loans provide fast cash, they do come with some disadvantages, including:
- Higher cost: Short-term business loans typically carry a higher annual percentage rate, or APR, than long-term loans. Use NerdWallet’s business loan calculator to figure out how much a loan will cost you.
- More frequent repayments: Some lenders require payments daily or weekly as opposed to monthly. Although these payments are smaller, their frequency can be an issue for businesses that have uneven sales or don’t always hold much cash in a bank account.
- Risk of debt trap: The speed and ease of short-term business loans can become addictive. Instead of repaying the debt in full, business owners may be enticed to refinance and roll over the debt into a new loan.
Find and compare the best small-business loans
NerdWallet has created a comparison tool of the best small-business loans to meet your needs and goals. We gauged factors including lender trustworthiness, market scope and user experience, and arranged them by categories that include your revenue and how long you’ve been in business.